SAN FRANCISCO, Nov. 23, 2020 /PRNewswire/ -- Hagens Berman urges JOYY Inc. (NASDAQ: YY) investors with losses in excess of $250,000 to submit your losses now. A securities fraud class action has been filed and certain investors may have valuable claims.
The complaint alleges that Defendants misrepresented and concealed that: (1) JOYY had dramatically overstated its revenues from live streaming sources; (2) the majority of users at any given time were bots; (3) the Company utilized these bots to effect a round-tripping scheme that manufactured the false appearance of revenues; (4) the Company overstated its cash reserves; and (5) the Company's recent acquisition of Bigo was largely contrived to benefit corporate insiders, including JOYY's co-founder, CEO, and Chairman David Xueling Li, who set up Bigo.
Investors began to learn the truth, according to the complaint, on Nov. 18, 2020 when research firm Muddy Waters Capital published a scathing forensic report, "YY: You Can't Make This Stuff Up. Well…Actually You Can." Muddy Waters accused JOYY of (1) being a multibillion-dollar fraud, (2) massively overstating reported revenues by engaging in improper round-tripping transactions, and (3) massively overstating Bigo-related revenues and Bigo's valuation to secretly enrich Li when JOYY, in March 2019, paid over $1.4 billion for the remaining 68.5% of Bigo that JOYY did not already own.
This news sent the price of JOYY American Depositary Shares crashing lower on Nov. 18, 2020.
"We're focused on investors' losses and proving JOYY deceived investors about the Company's true operations and financial results," said Reed Kathrein, the Hagens Berman partner leading the investigation.
Whistleblowers: Persons with non-public information regarding JOYY should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
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